RitaB

I don't think there's a worksheet. If taxable (which I don't see why it would be if issued in the same year as the expense was paid and the son was a dependent), go to line 21 on Form 1040, open that list and there's a line there for taxable. IF taxable, only earnings are taxable, right? Don't know if contributions get distributed first (like ROTH). Try Part II of Form 5329, and see if that takes care of your situation. Sorry, that's about all I know. Edit: I must be the slowest typist on here. jasdlm sucked out my headlights.

You win. Your story is better than mine: Had a client, giving me her number, say, "I suppose you want that 423" (our area code, like I'm charging her to take that down or something... whaaa?) and waited for me to respond. I didn't see that coming. Same prefix as me, too. I just wanted to say, "You could have said the whole number three times in the space it took for that whole unnecessary communication that just happened." Yes, I understand Ray. I hear you, man.

Yes, for the love of all that is good and just in this world, please share the recipe. Please. I'm begging.

Doctor A sees a torn ligament on an MRI and says, "You have a torn ligament." You go to Doctor B (or call him) and say, "My knee really hurts." Doctor B says, "You have arthritis." You go back to Doctor A and ask him, "How come this is not arthritis? Another doctor said it was arthritis." I suspect Doctor A would be a little offended. After all, he had all the facts, ran the appropriate tests, and made the diagnosis using all the facts. Not like he flipped a coin. Doctor B didn't do any tests, but you liked what he said better. OK, go to Doctor B for treatment, then, and get Doctor B to provide you with some assurances of some kind. You know, run a second MRI or something. "Yes, I agree that HRB probably charge more so they came back to you, but something Greg Jackson once said comes to mind. 'If you can't give it away, sell it!'" My increased fee should help with that. I can smell that cinnamon roll from here. MMMM...

The guy got the answer he wanted from HRB, but came to me, I guess hoping I would change my mind about what to do with his portfolio loss. I figured he also got a quote from HRB, which was higher than my fee, or he would have let them do the return. There IS more to it than that, though. These people came to me three years ago after they screwed up their own return, doing it themselves. Last year, when I mentioned car sales tax deduction, they said they would be able to do that 2009, cause they bought car in January 2009. After I finished the 2008 return (about a week later), and told 'em it was ready, they realized they bought the car Dec 2008. I re-did the return, free of charge, and they did not even thank me for doing that, let alone apologize for the extra work. I don't want these people now. BTW, it WOULD irritate me if a client got a second opinion (from any preparer) about a question that I answered quickly and decisively, devoting more than adequate time explaining the issue. It's not like I wasn't sure, had to research, hem hawed around, etc. And, I probably would go up on my fee. Yeah, pride goes before a fall, so I may be on the way down...

Nobody pays back amounts received based on 2007 return. I'm sorry, either I am REALLY misunderstanding this scenario, or you are. Is 2008 Form 1040 line 56 = $548? If so, the people qualify for $600 RRC less $600 SP, so the 1040 line 70 is zero. If 2008 Form 1040 line 56 = $650, they qualify for $650 RRC less $600 SP = another $50. Shows up on line 70, and they get a $50 credit on the 2008 return. Edit: Ok, my phone rang in the middle of this, and KC already explained it.

Correct. That's $52 plus $548 = $600 benefit to the client. Having a tax bill paid is equivalent to receiving the money. Gotta go, that chicken biscuit is calling my name.

Joel, I woke up thinking about this (cause I have no life), and I don't understand why your clients' potential RRC (before you enter SP on line 28 of the WS) is not $600. Did you enter SS benefits (and I assume they are not less than 2007)? Then, clients have other income, so that line 56 on 2008 Form 1040 is $548? They don't get more than $600 (either year) unless line 56 of Form 1040 is greater than $600. They don't get $600 for the SS benefits, plus any tax liability. It's $600 plus the liability over $600. (But no more than $1200 of course.) OK, I have to eat breakfast before I have LBSCBD (low blood sugar cranky butt disorder). Did I mention I have no life?

Sounds like somebody's gettin the old screw-u-lus, to use my friend Catherine's new word.

That never happens with my clients. Maybe once in the past six years. They had alot of expenses and were in the 25% or 28% bracket, I believe.

Joel, it sounds like they just owe $548 tax for 2008, and it is not related to the SP or RRC at all. If you click the box for the line 70 worksheet to calculate RRC, do they qualify for $548 RRC (without regard to the Stimulus Payment)? Then you enter the $600 SP and you're back to $548? If so, don't sweat it. They just have more income in 2008. At least that's how I understand it. I believe a couple with only SS benefits vs. another couple with a tax liablity of $600, could both get $600 SP last year, unless I have lost my mind, which is entirely possible. Don't know if thinking about it that way helps or not.

You are one wise person, John. I learn a lot from you. Just wanted you to know. Hope you feel better. --- Rita BTW, those people in the empty bathtubs on the Cialis (sp?) commercials just make me sick. Who does that anyway? Sit in two empty bathtubs on the beach or in the neighbors yard, wherever they are?

Not a dumb question. It's a dumb form. Or maybe the requirements for completing it are dumb. Anyway, you really can't tell much looking at your typical 1098-T. Just ask the client the amount of the qualified expenses they paid. Ask specifically if there was any tax-free assistance, cause it's not always on the form. I have seen kids actually MAKE money on scholarships. Had an ex-military guy that had all the expenses paid by the government, and there was nothing on the 1098-T to indicate that.

Yeah, another primary indicator of how good the preparer is did I get away with it. Just got a new client, got audited last year, lost, and blamed it all on preparer who deducted a bunch of commuting miles that he didn't know about. OK... Guess what he wanted to deduct this year? Farm tractor. Are you producing a commodity for sale? No, we're raisin' some dogs though. What are you doing with the tractor? Bushhogging and plowing the garden. Selling anything out of the garden? No. They had their stimulus letter, though. Wha-hoo!

Oh, wow, my bad. No, I think you're doing it just right. Child would pay zero, unless the $1400 is short term. Good thing, too, cause a four-year probably can't write a check. Good investor though, huh?

Both of mine that were late were because I forgot to figure RRC. ( %^&* stimulus, *&(^ rebate, ^%&$ recovery, &*^% making work pay phone calls today...) Clients were really nice about it, though, so it all works out!

Diane - See if you are completing line 9 on the 8615, and that the box beside line 9. Form 8615 is a real jewel, huh? ---Rita

Yeah, and all the noise about RICH people getting away with murder regarding capital gains tax. L. S.' s couple with $63,000 adjusted gross getting a break on qualified dividends doesn't sound like the RICH getting away with anything to me. Sounds like ordinary folks getting an incentive to invest and get a little tax cut.

The first time or two, I like to turn over their SSA form, and just go thru the dadgum worksheet with em. I get so tired of this, too. Why would your form have this worksheet if there was no way your SS is taxable? I have one guy that I swear next year when he starts that crap, I'm gonna say, "Yeah, let's just leave it off."

I know! Even though I made that IRS page one of my home pages after the first couple of weeks, I still wonder if I've missed somebody. Those folks were early, and I think I'm more aware now, but it's tough to remember everything, huh? I went back through the ones laying here ready to pick up this morning, and I missed one of THOSE! Think I'll put a big yellow sticker on the bottom of my monitor or something. Thank God these people are getting back more, and not less. Plus, you know that web page says "How much was MY stimulus payment?" NOT "How much was MY CLIENT'S stimulus payment?" If anybody gets ugly (they won't) I'll put it back in their lap, by Georgie. Boy, I'm grouchy...

I do a few payrolls, and this is gonna be a headache. Guy was nervous cause his FIT went from $14 to $0. Filled out the W-4 to have extra $20 a week withheld. I don't think that's what they had in mind, but I think that's the way it's gonna go. Also got the first two letters where I missed the RRC. I just gently asked, "Oh, did you give me that letter saying what you got, and I missed it? I'm so sorry." Both were super nice: "No, we forgot all about it, it wasn't your fault; we're just happy we got back more, just wanted to see if it was for real." If I never hear the word "stimulus" again, it will be too soon. I did hear someone, maybe Laura Ingraham on FOX, say "porkulous" yesterday. That's a keeper.

Thanks, Catherine! I missed the part about the SS witholdings from MA sources only. I hate to blame ATX, but when you enter the correct state for the wages (TN) looks like it would link to the MA return and NOT automatically give credit. I still think it stinks to include TN source interest in his MA taxable income, but I guess they don't care what I think. Thanks again for your help! --- Rita

I would do what you said Catherine. I would also try to get the return done ASAP in case IRS does not give a fat rat about your extension request. I think it's late anyway, even if they consider the rejected e-filed request. Wasn't the reqest due Monday? Was Monday a holiday, and I missed it? That has happened to me in the past... Edit: Maybe they are not on a calendar year. If so, nevermind all that rambling up there.

I find that clients take it out on us no matter what. Had a church friend who did some exchanging of her 14 year old twins funds in June. No info on the 1099-B about basis. Of course, she is clueless, and in denial that there should be anything that I need. After all, we just "switched 'em over to the other fund." Called advisor who faxed me info. Of course, there's a gain. Those $%^& 8615 forms were murder. Each twin owed $192. I explained to her again. An exchange is a sale and a purchase. Sent her email quoting Taxbook: Here's from one of my tax guides: Transfer of mutual fund shares. Any exchange of shares in one fund for shares in another fund is treated as a sale. This is true even if shares in one fund are exchanged for shares in another fund within the same family of funds. Author's Comment: This is a source of confusion for clients. The investment community may use the terms "transfer" or "exchange," but for tax purposes the transaction is a sale and a purchase. I charged her $200 for four returns, two with Form 8615. She STILL called me at home: "Let me get this straight, if we had not switched funds, we would not be paying this tax..." Arghhhh!!!! I gotta get some new friends.

Oh, thank you, Catherine. I did take a look at the directions, and I think the interest does get included. Course, a ratio using the other income is used and it's not ALL taxable, but I just can't hardly believe it's right. Needless to say, I don't do MA returns often. I think never, actually. The form REALLY stinks, no offense. Anyway, in the morning I will look again with fresh eyes. Good night, and God bless. Still praying for Aunt Mary!